Taxpayers can deduct automobile expenses as ordinary and necessary costs of doing business and the Internal Revenue Code and Regulations allow either itemized expenses to be deducted or a standard mileage rate to be deducted. Each year, sometimes more than once, the IRS updates the standard rate for businesses and other deductible automobile uses. For 2013, the IRS has said that the following mileage allowance will be used: 56.5 cents per mile for business miles driven. The 2013 rate is 1 cent higher than the 2012 rate. So you have the option of computing the actual costs of using your vehicle or using the 56.5 cents per mile standard rate in 2013.
There are some specific rules, of course, that you need to follow in order to be able to use the standard mileage rate, so we suggest that you consult your tax adviser before making any changes to what you are doing for 2012.
There are standard mileage rates for other than business use of your car, and those other standard rates and uses are as follows:
Medical or moving expenses: 24 cents per mile
Charitable use of your personal vehicle: 14 cents per mile
Jeremiah K. Murphy, CPA is an accounting firm providing tax services, audits and business consulting.